#10192 - Price Payment Delivery - International Commercial Law

Agreeing the price

(UK provisions)

S8 and s9

• Most circumstances, the parties will agree the price. May be done in a number of ways:

1. Use of price list or quotation;

2. Agreed during negotiation;

3. Determined by a consistent course of dealing between parties;

4. Price fixed by valuation of a third party (s9- void if this doesn’t happen).

Price lists & quotations:

• Where this is the case, important to specify the length of time for which any quoted price or price list will remain valid.

• Specify what is included in the price.

Price escalation clauses:

• If there is a likelihood that costs of raw materials or labour will increase between signing contract and delivery, can include a price escalation clause.

• In absence of such a clause, S will not be able to change the price.

• Will be subject to reasonableness under s3 UCTA.

VAT:

• Price taken to include VAT unless otherwise specified (VAT Act 1994, s19 (2)).

• If exclusive, must be expressly stated.

Duty to pay the price

(UK provisions)

Ss27-29

• Under s27 SGA, it is B’s duty to pay the price.

• Where contract provides for cash on delivery, B cannot claim possession unless it is able to pay in accordance with the contractual terms agreed.

• Only payment in full will discharge B’s liability (unless agreed otherwise).

Time for payment:

• S28 SGA states time for payment is when goods are delivered (unless agreed otherwise).

• However, payment may be linked to the issue of an invoice. The Ps may wish to agree that:

1. Payment be made in advance;

2. B is given a credit period (say 30 days from delivery of invoice) in which to pay.

• S10 (1) unless expressly stated, time of payment is not of the essence.

• Interpreted to mean that failure to pay is not a breach of condition entitling the S to treat contract as repudiated and to sell goods elsewhere. Limits S’s right to price and damages, if any, for late payment.

Method of payment:

• S28 SGA seller is entitled be paid in cash (unless contrary agreement):

1. If S accepts cheque or other negotiable instrument, treated as conditional payment. If cheque is not honoured, S may sue for the price either as breach of SOG contract or on the cheque being a contract in itself;

2. Payment by credit card will usually be treated as absolute payment.

• Art 58 Vienna convention unless otherwise agreed, B must pay when the goods are made available to him.

• UCC similar provision in Art 2-310;

• UNDROIT Art 6.1.4- all obligations must take place simultaneously unless agreed otherwise.

Late payment:

• In absence of contrary agreement, damages payable for late payment by English courts under various statutes (see pg 47).

• Contract should provide for late payment in order to avoid reliance on these.

• EU governed by Directive 2011/7/EU on Combating Late Payment in Commercial Transactions (see pg 47).

UK provisions

• S27 SGA duty of S to deliver, in the legal sense, the goods.

• No general duty to transport goods to the buyer.

• Goods must comply with the contract (implied conditions under s12, 13, 14 & 15.

• Failure B can reject goods.

International provisions

• Mirror the UK provisions.

• Vienna convention Art 31

• UNIDROIT Art 6.16

• UCC Art 2-308;

• PECL Art 7:101.

UK provisions

• S27 SGA duty of buyer to accept and pay for the goods in accordance with the terms of the contract of sale.

• Failure to do so statutory rights/ remedies for the S.

International provisions

• Vienna Convention Art 53- B under obligation to take delivery.

• UCC similar obligation under Art 2-301.

• UNIDROIT no direct mention of delivery (likely to be implied under Art 5.1.2).

• S35 (1) B is deemed to have accepted the goods when:

1. It tells the seller that it has accepted them; or

2. It does any act in relation to them which is inconsistent with the ownership of the seller (such as sells them to a 3^rd party or uses them).

• S35 (2) acceptance will not take place until B has had reasonable period to examine the goods to ensure that they conform with the contract.

• S35 (4) B deemed to have accepted the goods if it fails to notify the seller within a reasonable time that it wishes to reject them.

Passing of the risk:

• S20 (1) risk passes with the property in the goods, that is with the title to/ownership of the goods.

• S32 (1) where goods are delivered to a carrier authorised by B, transfer of possession to the carrier constitutes delivery. Goods at B’s risk from point at which they are in carrier’s possession.

• S20 (2) if there is a delay in delivery, during the period of delay, the goods are at the risk of whichever party to the contract caused the delay (can be varied by contract).

Place of delivery:

• S29 (2) default provision- place of delivery will be S’s place of business or residence.

• Contract should expressly deal with where the delivery should occur.

Date of time or delivery:

• Default s29 (3) - should take place within a ‘reasonable time’.

• ‘Reasonable time’ depends on the circumstances and facts at time of delivery.

1. Where S delivers goods- delivery time will be when goods are handed to B;

2. Where B collects goods, delivery will be when B physically removes the goods from S’s possession.

3. Where delivery is to a carrier, delivery will be when S hands goods to carrier.

• Must be at a reasonable hour (s29 (5)).

Express delivery dates:

• S10 (1) time of payment not of the...